HONG KONG, Feb 1 (Reuters) - Hong Kong shares extended a
retreat from a 21-month high on Friday, dragged down by
growth-sensitive stocks after an official survey of
manufacturing activity in China disappointed expectations.

The onshore Chinese market recovered from early losses in
choppy trading, as agricultural-related sectors were bolstered
by a series of policy announcements, including rural land
reforms to promote large-scale commercial farming.

The CSI300 of the top Shanghai and Shenzhen
A-share listings went into the midday trading break up 0.5
percent, while the Shanghai Composite Index was flat.
For the week, they are up 5 percent and 4.1 percent
respectively.

The China Enterprises Index of the top Chinese
listings in Hong Kong fell 0.5 percent, while the Hang Seng
Index was down 0.4 percent at 23,624.5, slipping further
from Wednesday's 21-month closing high. They remained up 0.6
percent and 0.2 percent, respectively, on the week.

Both markets had started the day weaker after the official
purchasing managers index (PMI) eased to 50.4 for January, below
December's 50.6 reading and below forecasts for a nine-month
high of 50.9. But, another private survey released by HSBC
showed growth quickening to a two-year high in January.

But both surveys showed factory output in the world's
second-largest economy rose in January, though the starkly
different speeds suggest a patchy revival in activity.

"Data this month may have been skewed by some methodology
issues, but if you look at the HSBC reading, which is more
skewed to smaller enterprises, it actually suggests the uptrend
is intact," said Hong Hao, chief strategist at Bank of
Communication International Securities.

"From my communication with fund managers, the greater
dilemma is deciding how to deploy the increasing amount of money
coming their way after such a big run up," Hong said. "That is
raising concern that we are due a correction soon."

China property stocks were mixed, with some falling despite
a report in the official China Securities Journal newspaper that
a pilot programme to implement a property tax in Beijing has
been postponed.

Wynn Macau fell 2.3 percent after its parent group
Wynn Resorts Ltd WYNN.O posted on Thursday underwhelming
quarterly earnings that were blamed on its declining share of
the Macau gaming market.

Most of its Macau gaming sector rivals were broadly higher
ahead of monthly gaming revenue data. Sands China was
up 0.5 percent, while SJM Holdings was up 2.1 percent.

Data released at the midday trading break showed Macau
gambling revenue rising 7.3 percent in January from a year
before, weaker than a 10-12 percent growth consensus forecast.

AGRICULTURE STRENGTH

Strength in agricultural-related plays were lifted by
Beijing's focus on modernizing the sector in its "number one
document" for 2013. The "number one document" is a key indicator
of policy priorities and has focused on rural matters every year
since 2003.

For 2013, Beijing said it would grant more subsidies to
large-scale landholders, family farms and rural cooperatives as
it tries to provide more incentives to bring economies of scale
to the fragmented countryside.

Heilongjiang Agriculture rose 2.3 percent in
Shanghai, with a sub-index of agriculture stocks listed in
Shanghai and Shenzhen outperforming the broader
A-share market, up 1.2 percent.